Yahoo Music exec suggests we’d all be better off without DRM

At a conference yesterday, a Yahoo Music executive suggested that the music …

What would happen if all the major record labels had a change of heart and started selling music unencumbered by digital rights management restrictions? The head of Yahoo Music thinks it would be all good. Speaking at Music 2.0 (it's like Web 2.0, but with a beat), Dave Goldberg suggested that the RIAA and member labels give sales of non-DRMed music a try.

Using the example of eMusic, which still uses non-DRMed MP3 files, Goldberg said that the current situation is causing problems for consumers. Different DRM measures result in incompatibilities between music services and digital music players (e.g., the iPod and every WMA-using music store). As a result, consumers end up being locked into a single service and music player, which ultimately hurts the industry. If the music industry wants to continue its online growth, it needs to pay more attention to the consumer experience.

At first glance, it might seem surprising that a player in the music industry is expressing concern about the experiences of those who put their hard-earned coin to work keeping the industry approach. However, the online music stores and subscription services have to keep the consumer experience in mind much more than the record labels.

Right now, the DRM landscape in the digital music market is divided into two camps: Apple and everyone else. Apple's self-contained universe of iTunes Music Store for purchasing, iTunes for listening on a PC, and iPod for music on the go has proven to be popular. That may be the reason for near 80 percent market share of music downloads.

Yahoo Music is part of the Everyone Else camp. Its subscription service with its lowball pricing (as little as US$4.99 per month) has received good feedback and arguably poses a threat to more-expensive competition such as Rhapsody and Napster. However, as long as Apple refuses to license its FairPlay DRM, Yahoo and the other services are left to battle over a small piece of the digital music pie.

That pie is likely to get bigger over time, which should mean bigger pieces for the players that survive the hiccups of an immature market. But if the record labels were to have a sudden change of heart over using DRM, it would drastically level the playing field. The services would be able to compete purely on features and pricing instead of things such as platform and compatibility.

Of course, the labels would have to agree to sell unencumbered music, and that's about as likely as a Chicago Cubs World Series win. Despite the obvious benefits to consumers, the music stores, and arguably the labels, the music industry is so concerned about the bugaboo of file sharing that it's unlikely to ever relent on the issue of DRM. However, the labels are losing sales because of their steps and missteps with DRM. As a Canadian record label executive commented, "why do you want to piss off the people who buy?" Apparently, the answer is because the labels think that if they give consumers no other choices, they'll buy anyway.

Are they right? The music download market is growing rapidly even as sales of the discs themselves drop. However, digital music sales still make up a small fraction of the market. If the studios dropped DRM, that would likely spur the growth of downloads even more, which would be a good thing for the labels since there are no manufacturing, packaging, and shipping expenses involved. But the truth is, DRM is not about piracy at all. It's about double- or even triple-dipping as consumers get charged multiple times for the same content. So measures that give the labels more control over where and how you listen to music and what you do after you buy (or rent) it aren't going away anytime soon, no matter how much more sense the alternatives make.

Eric Bangeman
Eric has been using personal computers since 1980 and writing about them at Ars Technica since 2003, where he currently serves as Managing Editor. Twitter@ericbangeman